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Tether’s CEO, Paolo Ardoino, responded to Ripple after the company’s CEO claimed that the US government is targeting USDT.
While Ardoino did not explicitly name Ripple or its CEO Brad Garlinghouse, his remarks likely allude to Garlinghouse’s previous comments expressing worry that increased scrutiny on Tether could negatively impact the cryptocurrency market. Notably, Ripple is set to introduce its own USD-backed stablecoin in June.
“An uninformed CEO, leading a company under investigation by the SEC, launching a competing stablecoin (cui prodest), is being reported spreading fear about USDT,” Ardoino stated in a post on X on Monday.
An uninformed CEO, leading a company under investigation by the SEC, launching a competing stablecoin (cui prodest), is being reported spreading fear about USDt.
Let me give you an update on Tether USDt ecosystem safety.
USDt is the most used stablecoin in the world, with…
— Paolo Ardoino
(@paoloardoino) May 13, 2024
Ripple did not respond to Cryptonews’ request for comment by the time of publication.
Tether Under Examination for Transparency and Sanctions Issues
Garlinghouse’s comments arise amid worries regarding Tether. As reported by TRM Labs, terrorist groups and nations under sanctions, such as Russia, allegedly utilized Tether to bypass US economic restrictions.
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Moreover, regulators have voiced concerns about stablecoins issued outside the US, including Tether. They have pointed to potential links to illegal financial activities. Stablecoins, which are pegged to fiat currencies, have become increasingly popular for enabling transactions within the cryptocurrency ecosystem. This has resulted in heightened scrutiny regarding issuer transparency and regulatory oversight.
Tether CEO Emphasizes Anti-Illicit Activity Initiatives and Regulatory Adherence
In defense of Tether, Ardoino pointed out that USDt is the most widely used stablecoin worldwide, with hundreds of millions of users, especially in emerging markets and developing countries. He stressed that USDt has consistently shown strong price stability, significant liquidity reserves, reputable custodianship, and thorough compliance measures over time.
He also defended the company’s compliance history. The executive provided data to illustrate Tether’s collaboration with global law enforcement and adherence to regulations. Specifically, he highlighted Tether’s compliance with the OFAC/SDN (Office of Foreign Assets Control’s Specially Designated Nationals) lists.
He noted that Tether has blocked over $1.3 billion in potentially illicit funds since its inception. The vast majority of these funds are associated with scams, hacks, and money laundering, with a smaller portion (approximately $1.6 million) flagged for potential terrorist financing.
Tether has previously faced criticism for a lack of transparency regarding the assets backing USDT. However, it has taken measures to mitigate this issue. In recent years, it has started publishing quarterly audits conducted by independent third parties.
This change followed an incident in October 2021 when the Commodity Futures Trading Commission (CFTC) imposed a $41 million fine on Tether for misleading customers about its reserves. The CFTC determined that Tether had sufficient traditional currencies (fiat) to fully back USDT for less than one-third of the time between 2016 and 2019.
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